BlackStar Enterprise ($BEGI): The Future of Stock Trading
Fellow Sapiens, I am pleased to introduce you to BlackStar Enterprise Group. Before embarking on this journey, I have to warn you that it is a highly risky investment. The company has a shell risk on the OTC markets, meaning that it has the characteristics of typical shell companies.
Although shell companies by themselves are not inherently bad, they have been often used in the past to conduct illegal transactions and defraud investors. In this case, BlackStar is owned by the International Hedge Group, which can conduct funding structures independently of BlackStar. Now that we have set the expectations, let’s begin.
BlackStar is currently primarily engaged in merchant banking. Their investment strategy lies in finding emerging growth companies in the USA to facilitate joint venture capital financing. But this is not the key driver going forward. They have dipped their toes in the crypto world with their two subsidiaries, Crypto Equity Management Corp, a company that looks for opportunities in crypto-equity ventures, and Crypto Industry SRO, a self-regulatory membership group for the crypto-equity market. But there’s more to it.
Since 2018, the company has been developing the BlackStar Digital Trading Platform, a blockchain-based software platform to trade its BlackStar Digital Equity, the digital share of BlackStar common stock.
The aim is to build a platform as a service that can be used by other publicly listed companies. The platform, as opposed to crypto exchanges, will only trade shares registered with the SEC and use a private blockchain to settle transactions whilst being compliant with securities law. Moreover, the platform will record trading activity to an immutable ledger, only when the trades are considered valid. As the blockchain can never be rewritten, this will make it impossible to front run transactions.
BlackStar presented its concept in July 2020 to the SEC FinHub staff. The guidance that they received revolved around applying for the Alternative Trading System, or ATS, status, and becoming the ATS itself or pairing with existing ATS’s. The company believes that its trading system is similar to that of spot market in commodities trading. The spot market will enhance liquidity, reduce bid and ask spread and be decentralized to combat malicious short selling. The order flow will be transparent to the regulators and the issuer of the securities in real time, and be recorded to an immutable blockchain ledger hosted by Amazon’s Hyper-Link Blockchain. All these characteristics should lead to a boost in investor confidence in trading OTC shares.
To finance the completion of the construction of the platform, the company raised a convertible note amounting to 220,000 dollars. Their trading platform is nearing completion, expected to be finalized in Q2 2021. It is worth noting that in the past, the stock has spiked based on the blockchain related news, only to plummet after. But having a live product is a small step in the right direction. They will likely have to raise more money going forward to fund further developments to scale the trading infrastructure.
Now, with all that in mind, I would like to remind you that this is my personal opinion. It should not be construed as financial advice. Please conduct your own due diligence before undertaking any investments. With that said, do you believe in BlackStar’s value proposition? Will you be buying their shares? And if not, why?
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